In late July, the commercial property insurance company FM Global released a report warning supply chain professionals to start thinking about how increased extreme precipitation could affect their supply and distribution networks. The report felt eerily prescient in August, when 6.9 trillion gallons of rain fell on Louisiana in a single week, causing floods of epic proportions.
Titled "Coping with Extremes: The Impact of Climate Change on Extreme Precipitation and Flooding in the United States and How Business Can Prepare Now," the report urges companies not to wait until the water starts to rise but to take steps now to reduce the impact of flooding on their own and their suppliers' operations.
For one thing, it's time to rethink the old rules of thumb, advises the report. It used to be good practice to avoid locating DCs within a 100-year flood zone. Now, the insurer recommends that new facilities be located outside the 500-year flood zone range.
Supply chain professionals may also want to consider learning some new skills, according to FM Global. "It might not be top of mind for supply chain managers to know about flood hazards and terminology and to be able to read a flood map, but these are good things for them to have in their back pocket," said Louis A. Gritzo, vice president and manager of research at FM Global, in an interview.
Read the full report.
Gartner, Inc.
